Google has committed to invest as much as $2 billion into Anthropic, an artificial intelligence (AI) company, raising the stakes in a high-stakes battle to drive AI integration among Big Tech players.
The deal is structured as a convertible note, a type of debt that will convert to equity at the startup’s next funding round, an Anthropic spokesperson confirmed, with an upfront cash infusion of $500 million and an additional $1.5 billion to be invested over time. This is in addition to Google’s previous investment of $300 million in April, securing the company a 10% stake in Anthropic.
The fresh investment underscores an intensification of Google’s efforts to better compete with Microsoft, a major backer of ChatGPT creator OpenAI, as Big Tech companies race to incorporate AI into their applications.
Anthropic was founded by former members of OpenAI, which is backed by Microsoft, and has developed Claude 2, a chatbot that rivals OpenAI’s ChatGPT. Anthropic was valued at $4.1 billion earlier this year. Claude 2 has demonstrated remarkable capabilities, scoring above the 90th percentile on the GRE reading and writing exams, and similarly on quantitative reasoning.
Amazon.com also said last month it would invest up to $4 billion in Anthropic to compete with cloud rivals in AI. In Amazon’s quarterly report filed with the US Securities and Exchange Commission (SEC) last week, the online retailer detailed that it invested in a $1.25 billion bond from Anthropic, which is convertible into shares. while its ability to invest up to $2.75 billion in a second.
Google’s investment in Anthropic will help the startup expand its research and development efforts, as well as accelerate its growth in the AI industry. The investment will also help Google better compete with Microsoft and other Big Tech companies that are investing heavily in AI startups.
